Exam (elaborations)
CSUF MKTG 351 CHAPTER 21| 38 QUESTIONS AND ANSWERS
- Module
- MKTG 351
- Institution
- Oxford University (OX)
CSUF MKTG 351 CHAPTER 21| 38 QUESTIONS AND ANSWERS
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CSUF: MKTG 351 CHAPTER 21 38QUESTIONS AND ANSWERS
How do you set a price? - answer -establish pricing goals
-estimate demand, costs, and profits
-choose a price strategy to help determine a base price
-fine tune the base price w/pricing tactics
Define price strategy. - answer the initial price and gives direction for price movements over the
product's life cycle
Define price skimming. - answer firm charging a high introductory price, w/heavy promotion;
later decrease price (above the market)
When does price skimming best function? - answer -when there's a strong demand for product
Define penetration pricing. - answer charging a relatively low price for a product when it is first
rolled out as a way to reach the mass market (below the market)
What is an advantage of penetration pricing? - answer -discourages or blocks competition from
entering the marker
What is a disadvantage of penetration pricing? - answer -gearing up for mass production to sell
a large volume at a low price
Define status quo pricing. - answer charging product price similar to that of the competition (at
the market)
, Define unfair trade practice acts. - answer laws prohibiting wholesalers and retailers from selling
below cost
Define price fixing. - answer an agreement between 2+ firms on the price they will charge for a
product
Describe the Robinson-Patman Act of 1936. - answer this act prohibits any firm from selling 2+
different buyers w/a reasonably short time, commodities of like grade and quality at different
prices where the result would be to lessen competition
Define predatory pricing. - answer practice of charging low prices for a product w/the intent of
driving competitors out of business
What factors must be considered to violate the Robinson-Patman Act of 1936? - answer -price
discrimination must take place
-transaction occurring w/in interstate commerce
-product sold must be commodity or other good
-products must be of grade and quality
-significant competitive injury
What 3 defenses could be used for a seller charged w/price discrimination? - answer -cost
-market conditions
-competition
Define base price. - answer general price level at which company expects to sell good/service
What are some tactics for fine-tuning the base price? - answer -discounts
-geographic pricing
-other pricing strategies
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